Question

A country's ability or intention to meet its financial obligations determines its ________. political risk economic risk legal risk technological risk

Answer 1

A country's ability to meet its financial obligations is the main determinant of its "economic risk". Whether a country will be able to repay debts which it takes on, such as in the form of bond issues, is a key driver of the willingness of investors to make capital contributions to a country, and the return that they expect in exchange for assuming that risk.